Forecasts of power bill rises spark war of words

Anna Patty, Ben Cubby -Apr 13, 2012

POWER bills will rise between $182 and $338 a year from July 1, figures from the state's independent price regulator show, sparking a war of words between the state and federal governments over the impact of the carbon price.

The Independent Pricing and Regulatory Tribunal's draft determination allows for an average electricity price increase of 16 per cent across NSW, half of which it attributed to the carbon price and half to the building of new electricity infrastructure.

The state government said it showed that the national carbon price would be a ''wrecking ball through the entire economy'', but the federal government said that household compensation more than covered the additional costs imposed by the impost on carbon.

In practical terms, it means that the price rises NSW households will face are solely due to new infrastructure.

EnergyAustralia, which serves customers in Sydney's east and north, would need to increase its prices an average 19.2 per cent - an extra $6.50 a week or $338 a year, while small business owners would pay an extra $439 a year. Most of this cost was a result of the energy provider's investment in the electricity network's ''poles and wires''.

For Integral Energy residential customers, the increase would be substantially less at 10.3 per cent, or an extra $182 a year on average. About 90 per cent of this increase was a result of the carbon price. Country Energy customers faced an increase of 17.6 per cent - an extra $381 a year for families and $494 for small businesses. The rises predicted by IPART are the same as the federal government's forecasts.

The NSW Energy Minister, Chris Hartcher, said he could not reject the tribunal's price recommendations and blamed federal Labor for forcing households and small businesses to foot the bill for its carbon tax and ''costly green schemes''.

He also called for the closure of the federal government's renewable energy target - legislation which is supported by the federal opposition. The NSW government would be including a note on household power bills blaming the rises on the federal carbon price, he said.

The federal Minister for Energy Efficiency, Greg Combet, said the proposal to attribute the rising price to the carbon price was ''factually incorrect and misleading'', and he expected that regulatory bodies such as the Australian Competition and Consumer Commission would investigate that claim.

''It demonstrates that Tony Abbott has deliberately misled the community about the impact of the carbon price,'' he said. ''And now the independent regulator has come out and said that the average price impact will in fact be exactly what the federal government had forecast.''

The tribunal's chairman, Peter Boxall, said the price rises were ''necessary to ensure that retailers can recover the costs of providing electricity and remain financially viable''.

The draft determination also examined other cost-saving measures. "There are aspects of the national electricity rules and the national electricity law that could be changed to reduce pressure on prices,'' Mr Boxall said. ''We've also outlined some areas around reliability standards, green schemes, and subsidies that could be reviewed to ensure maximum cost effectiveness to limit future price increases.''